An analysis of monopoly pricing is presented. The analysis focuses on a general framework which is conditioned by an unknown population distribution of consumer characteristics, downward-sloping, multi-unit demand and increasing marginal cost. It is shown that the inclusion of reference point pricing boosts profit-maximizing allocation. In addition, nonlinear pricing approaches optimal monopolistic conditions when consumer numbers increase.
Publication Name: Journal of Economic Theory
Labour hoarding, price rigidity and the theory of imperfect competition under uncertain demand
An examination of monopolies under uncertainty reveals that a monopolistic firm may have an incentive to hoard some of its output unsold when demand is low because the marginal revenue becomes negative or lower than the product's selling cost. Moreover, in this economic condition, prices tend to be more rigid downwards than upwards. The model also provides explanations for labor hoarding in the absence of exogenous price rigidity.
Publication Name: Scandinavian Journal of Economics
Uncertainty in interdependent economies with monopoly unions
A study was conducted to examine uncertainty in interdependent economies with monopoly unions. Results show that such economies exposed to symmetric shocks generate cooperative monetary stabilization policies which are not necessarily advantageous. However, such a situation raises the uncertainty of inflation. Labor unions would then hedge against such uncertainty, which leads to a reduction in employment.
Publication Name: Journal of Macroeconomics
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